I asked for US assets.
But look guys and gals, why don’t some of you also call IB. 0415620902. Swiss number. It’s easy as you have the choice to keep your queue number and they will call you back. Was all done in 5 minutes for me.
Then at least we would have answers from different IB employees ideally in different languages etc. The more the merrier and at some point they would probably clarify publicly
I am confused then with your preface in the original post - what did it mean?
US tax NOT involved
I meant to say that even if you have US assets, according to IB, there are no US tax obligations. (As a CH resident). But again, can you please all call them as well. I told you what I was told. Now let’s see what other employees at IB based in Zug say.
Because it is useless.
Sometimes support says one thing, sometimes another. We only have reports of people having the IRS enforced on them by IBKR, but no reports of them just releasing the assets.
I got the “no worries” answer, too. Then I read reports to the contrary, and asked them which of both is true. They don’t answer that.
Like they don’t answer where they keep the cash on the UK accounts. Is it in the US? Then that is US situs, because IBKR is a broker and not a bank.
Well, if we don’t even know if the cash is in the US or UK, then there is another reason to not wake sleeping dogs, if you know what I mean. Like, how would that even work, you notify IRS while saying we’re not sure if we have US situs assets (cash) or not.
No, IBKR could just block your account till your heirs notified the IRS, containing plausible numbers from your account.
You won’t be able to claim you have less than 60k US situs to IBKR, if your account already contains more than that in US situs cash.
Now we are going in a loop. IB CH said they don’t need anything from IRS. So they won’t block your account.
Read my comment above again. IBKR is not able to give an answer.
All the more reason for more of us to call. For them to clarify.
Which they don’t. And if they do, it is not binding. But yes, maybe if we call enough, they will ask HQ compliance.
As a start make sure you get an answer in writing, the bar for that is typically higher. (And be really clear, eg you hold over 60k US assets at IB)
Or you can do a drill and pretend to be the dead spouse and see how it works 
But you signed the contract with IB UK, right?
Only the customer service is in CH.
I would play safe and keep it at a Swiss bank/broker, speaking only for me.
Or your can prepare a nice AI-video /-phone call where you order the transfer of shares, despite you are already dead.
Somehow this conversation has turned off-topic (who I signed with; that it’s pure chance that the guy I spoke to said IRS not involved; playing dead etc.). Of course we will get no 100% confirmation, even if IB answers us in writing. And even if they confirmed everything, it can change tomorrow with a change of tax codes.
I was only interested in what my spouse would have to do when dealing with IB CH. Dealing with IRS is probably an entirely different question.
The tax exemptions are quite generous, so chances are that no US estate tax will be due for most of us.
If IB realizes that millions of assets flow elsewhere because of tax uncertainty, they will have an incentive to be more clear. But that only works if they are aware of this. Hence again, if you all call, we have no more certainty on the tax. BUT IB will know that they are losing clients assets by being evasive in their answers.
Maybe it’s a joking matter for now, but since, at the time of writing this, I am alive, I can still show my wife what she would have to do, even if IB asked for IRS forms. Avoiding the US market, the most liquid market in the world, for 20,30,40 years on assets in the millions (as most FIRE people eventually have) just to be cautious sounds off to me.
But this is objectively wrong and we know it, right? From the US perspective a CH resident absolutely can have tax obligations to US when they hold US-situs assets.
Trusting someone at IB on this would not make sense IMO because they are not an authoritative source on US tax law.
So US definitely claims that there are US tax obligations and then a different question is, in practice, how this will be enforced. One thing that IB can be authoritative on is whether IB themselves will enforce US tax claims on your or not (basically whether they will freeze the assets). If that is what was told to you on the phone - that is good news (if instead the person on the phone literally told you there are no US tax implications - they were just incompetent). Of course it is not a guarantee that once the push comes to shove the assets won’t be blocked - but it’s a signal and a useful one. Then it’s up to each individually to decide how much to trust these signals and plan accordingly.
If you plan on IB releasing your US assets without IRS declarations - that’s a legitimate choice, and then again it’s your personal choice on whether you expect/instruct heirs to file IRS declaration afterwards anyway (and there will be implications in both scenarios)
Correct. That’s exactly how I meant it.
If IB doesn’t care, then my spouse can get her hands on the assets. That’s step 1.
Then she can go to a tax advisor to handle the IRS. Step 2.
Nightmare would be if account is locked for years. And that worry has been slightly alleviated if IB CH wld release the funds without any IRS documents.
I am curious what happens if the heirs are not Swiss residents and live in a country with which the US doesn’t have a tax treaty? If a deceased person is a Swiss resident, does the exemption provided by the US-Swiss tax treaty still apply to those heirs?
Note: Not avoiding the US market - Avoiding the US-situs assets.
Got an email from IB
Im Todesfalle sollten Ihre Erben Interactive Brokers (IBKR) per E-Mail an estateprocessing-europe@interactivebrokers.com informieren.
Für die Nachlassabwicklung akzeptiert IBKR das offizielle Nachlassdokument (Erbbescheinigung) des Landes wo Sie Ihren Wohnsitz haben.
Zusätzlich benötigen wir zur Nachlassabwicklung Kopien der untenstehenden Dokumente:
Bitte beachten Sie allfällige Erbschaftssteuern aufgrund von US Wertschriften.
Unsere aktuelle Prozedur betreffen US Wertschriften für in der Schweiz wohnhafte Kunden finden Sie untenstehend (nur auf Englisch verfügbar)
Please be advised that Interactive Brokers does not provide tax advice. The responsible person or persons for the estate and heirs are ultimately responsible for determining tax obligations, if any, under U.S. Law. We urge you to seek professional tax advice.
Non-US resident, non-US citizens who owned more than $60,000 USD in US-located assets on their date of death may have estate-tax obligations to the US Internal Revenue Service. US-located assets may include, among other assets, stock in US companies, cash held at a US broker dealer (including Interactive Brokers LLC), and real estate or other tangible assets located in the United States.
Unless the court of a US state has designated an executor to administer the estate of the deceased, Interactive Brokers cannot disburse any such US assets (or proceeds from their sale until we receive EITHER:
(a) a letter affirming that on date of death, the deceased owned less than $60,000 in US-located assets , the letter does not need to be notarized, OR
(b) Option one
Because assets in the account exceed $60,000, we can disperse upon receipt of a Transfer Certificate issued by the U.S. IRS. We understand the IRS is backlogged and currently taking 2-3 years to issue certificates after receiving a 706-NA return. See https://www.irs.gov/pub/irs-pdf/f706na.pdf
(b) Option two
If, based on professional tax advice, you determine a full 706-NA is not necessary and no estate tax is due under the US-Switzerland estate taxtreaty (https://www.eda.admin.ch/dam/countries/countries-content/united-states-of-america/en/tax1951.pdf) (and that the treaty is still valid and in force) because under Article III the decedent’s estate falls below the applicable exemption, then IB can disperse assets upon receipt of the following:
IRS Form 706-NA completed as per the requirement described below
IRS Form 8833
an email from the executor/heir or other signatory on the forms stating that these forms have been filed with the IRS.
For your convenience we have provided the links to the forms here:
Form 8833 (Rev. December 2022) (irs.gov)form
PLEASE NOTE that under § 301.6114-1(a)(1)(ii) Treaty-based return positions (26 CFR § 301.6114-1 - Treaty-based return positions. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute), the IRS rules state that **“**If a return of tax would not otherwise be required to be filed, a return must nevertheless be filed for purposes of making the disclosure required by this section. For this purpose, such return need include only the taxpayer’s name, address, taxpayer identifying number (if any), and be signed under penalties of perjury (as well as the subject disclosure).”
It is the responsibility of the estate of the decedent to determine and comply with its obligations under U.S. tax law, if any. Interactive Brokers does not provide tax advice. We urge you to seek advice from a U.S. tax professional.
Mit freundlichen Grüssen
Heinz G
Estate Processing
IBKR Financial Services AG
A Member of the Interactive Brokers Group
Gubelstrasse 28
6300 Zug
Switzerland